Get the Best Bling for Your Buck When Buying a Diamond Ring -- Savings Experiment

How to Save When Buying a Diamond Ring
How to Save When Buying a Diamond Ring

Say your honey is on the hunt for an engagement ring that's a smart buy, but doesn't look like something that came out of a Cracker Jack box.

Or perhaps you're honeyless, at the moment, and just want to treat yourself to something special and sparkly -- but sensibly priced.

Here's what you need to know to find a good-quality diamond ring that gives you the best bling for your buck.

A Good Time for Diamond Deals

The overwhelming majority of diamond rings are purchased as engagement rings, with anniversary rings coming in second.

Still, this most coveted gemstone is not just for special occasions.

Diamond Ring
Diamond Ring

"A lot of women buy diamond rings for themselves," Russell Shor, senior industry analyst for The Gemological Institute of America, tells DailyFinance. "Fashion-oriented pieces are a big thing in the market now."

Whatever the occasion, if you're looking for a diamond ring at a good price, your time has come.

"New sources of mined diamonds are coming into the global market," Paul Swinand, a stock analyst with Morningstar, who covers the jewelry sector, tells DailyFinance.

And the U.S. is benefiting from a broader mix of suppliers, "which makes for more competitive pricing from the low-end to high-end diamond," he says.

Save by Knowing the "Four Cs"

A common spending benchmark for a diamond ring is the equivalent of two-months salary.

But be guided by your particular financial situation -- not social pressures or high-pressure sales pitches -- to determine what you can afford.

To get a good deal on a diamond ring, remember the letter "C." Four C's, actually.

The Four C's refer to carat, color, clarity and cut, the four characteristics that determine a diamond's quality. The GIA's diamond-grading system, which factors in those C's, has become the industry standard for professional jewelers.

Understanding these grades before you make a purchase will end up saving you money.

1) Carat

Carat refers to the weight of the diamond. And it's no secret that the bigger the diamond, the higher the price.

Generally speaking, "If you're on a tight budget, a one-carat diamond will be out of your [price range]," Shor says.

So by opting for a 0.5 carat diamond, for example, you could save a bundle.

What's more, once the diamond is mounted, the difference between a 0.5 carat diamond and a .44 carat diamond, for example, will be negligible in terms of looks -- but it will be notably less pricey, Shor says.

2) Color

In a white diamond, this measures how close the diamond is to white.

Colorless diamonds, which get the highest grades of D, E, and F (Z is the lowest grade on the scale), are considered premium because they allow for the greatest reflection of light and, therefore, emit the most dramatic sparkle, according to the Diamond Buying Guide. They also command a higher price.

But if you go down the scale and pick a ring with an H, I, J or K rated stone, which will still look good, the price will drop between 25% and 35% from that of a D, E or F rated stone, Shor says.

3) Clarity

The GIA's 11-grade clarity scale quantifies a diamond's blemishes, both inside and outside. (Keep in mind that most jewelers have never seen a flawless diamond.)

Grades range from F for Flawless -- which is extremely rare -- to Included 3, or I3, the lowest clarity grade.

But a diamond can still look luminous even when it falls below the four highest grades. (These are F for Flawless; IF for Internally Flawless; VVSI-VVS2 for Very, Very Slightly Included; and VSI-VS2, which means Very Slightly Included, according to the Diamond Buying Guide.)

A lower-clarity stone will save you a bundle. These include SI1 and SI2, which are "slightly included." They are a notch above the lowest clarity grades of I1, I2 and I3.

A SI2 stone will still look "unflawed to the naked eye" -- and will cost you far less than the higher grades, Shor says. And if you really want to save big, an I1 diamond is likely to cost a quarter of the price of a top-quality diamond, he says.

This grade does, however, connote that flaws are visible, although they're difficult to see, he says. But opinions differ. The Diamond Buying Guide argues that even nonjewelers will spot the flaws in I1 to I3 diamonds.

If you're happy with it, that's what counts.

4) Cut

Experts agree that this is where you don't want to cut corners: the cut. That's because the cut has a huge influence on the diamond's reflective qualities.

"You don't compromise on the cut; it's what really makes the diamond look good," Shor says.

A good cut makes a diamond sparkle and gives it its brilliance, he says. Choose a cut in the top two "excellent" and "very good" ratings on the GIA scale, and avoid "good," "fair" and "poor" cuts.

Although a "very good" and "excellent" cut will cost about 10% more than a "good" stone, it's better to save on the other Cs, Shor says.

Ask For Diamond Grading Reports

During the shopping process, if you're interested in a particular stone, ask the retailer to see a diamond-grading report, such as one from the GIA or the American Gem Society, which includes an assessment of each diamond's four C's.

These reports come from what the jewelry industry considers to be the most credible diamond-rating labs, Ken Gassman, president and founder of the Jewelry Industry Research Institute, tells DailyFinance.

Grading reports offer an impartial evaluation of the diamond's quality, making them the most concrete way to know what you're getting. They serve as proof of the grading claims a jeweler might promote on its ads or product tags.

Jewelers themselves depend on grading reports when buying gemstones for their businesses. What's more, a report will also serve as an identification document in case your ring ever gets stolen.

Know How Quality Affects Price

When purchasing a diamond, you'll typically buy it with the complete ring, although some independent jewelers might market them separately.

The average cost for a diamond engagement ring is $3,250, according to Gassman. The average price for all diamond rings, not just engagement rings, is $1,050.

The Diamond Buying Guide's Diamond Price Guide estimates what you can expect to pay, and what you'll get for your money. (But keep in mind that with the recent rise in gold prices, the prices on the market now could be a little higher, Gassman says.)

• The minimum price you can hope to pay for a diamond engagement ring is between $125 and $500. But, in this range, the diamond quality will be a mystery, because it won't be GIA or AGS certified, according to the guide.

• In the $500-to-$750 price range, the diamond quality will still be unknown, but the carat weight will be slightly larger than the lowest price range.

• The $750-to-$1,000 range is where "you start to see value for your diamond dollars," the report says. In this range, you can find smaller stones that have been certified by the GIA or the AGS, so you'll be aware of the value of what you're buying. These rings will likely come in 14-carat gold, 18-carat gold or platinum settings.

• The $1,000 to $2,000 price range will get you high-quality and mid-to-high-quality stones, certified by the GIA or the AGS, with carat weights of roughly between 0.30 and 0.75. They're available in 14-carat gold, 18-carat gold or platinum settings.

• Finally, in the the $2,000 to $3,500 price range, you can snatch up "absolutely exquisite quality diamonds," according to the report, which recommends that buyers stick with a low-carat ring at these prices. In this price range, bigger is not necessarily better. Stones of 1 carat and more tend to have drawbacks, such as a lower-grade cut or low color quality, according to the price guide.

Where to Shop

Shop for your diamond ring at a well-known jewelry chain, such as Kay Jewelers (SIG) or Tiffany & Co. (TIF); a respected independent retailer; or a well-known online store, such as Blue Nile or, Gassman says.

"Most consumers have little or no knowledge about a diamond -- its characteristics, the 'right' price," he says. "Thus, it is imperative that they shop with a merchant that they can trust, and who will likely be around for many years after the sale."

Don't be afraid to negotiate for a lower price. At specialty jewelry chains, such as Zales or Kay Jewelers, as well as at independent jewelry stores, "almost always, prices are negotiable," Gassman says.

That means you can either ask for a price discount or ask for an upgraded setting for the same price of a less expensive setting, he says.

But keep in mind, "the cheapest price is not usually 'the best deal," Gassman says. "You usually get what you pay for."

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